Newark, NJ (PRWEB) October 22, 2012
REMI issued its support of news that the United States housing market saw a 15-percent jump in new housing construction projects, rising to the highest level since 2008; REMI believes that this news would be a huge help for the housing industry, and is a sure sign of recovery from the housing crisis of four years ago.
Last month, home construction starts reached 872,000 for the year; not only did this number exceed all forecasts, but the growth rate reached the highest level since 2008. The numbers also showed an increase in building permits, a sign that the growth is probably sustainable. Proposed reasons for the spike in construction have included a dwindling inventory and mortgage rates at record lows; but analysts agree that this is, chiefly, a sign of economic recovery for the hard-hit housing industry.
Says Larry Sorsby, CFO of a well-performing New Jersey homebuilder, “It’s no longer a question of whether the industry is rebounding. There is clear evidence that we have bounced off the bottom and are in the midst of a recovery.” Following the report, stocks for homebuilders and lumber futures went on the rise, some jmping as much as 5 percent.
In response to this news, construction companies are feeling better about the real estate leads market. The National Association of Home Builders/Wells Fargo builder sentiment index, which measures confidence of homebuilders about the market, increased to 41 percent; this is the highest level since 2006, and the sixth straight increase for the index. Although the 41-percent figure still indicates a lack of majority confidence, this trend seems to be indicative of continuing recovery.
Other real estate professionals have pointed out that the tough economy has led to pent-up demand from buyers who have been waiting out the market doldrums. The revenue collections seem to indicate that; Lennar, a major Miami-based homebuilder, saw its quarterly profit jump more than 400 percent in the third quarter, and new orders climb 44 perfect, with contract backlogs (which indicate future sales) rising 79 percent. All of these point to a housing industry with high consumer demand, benefiting from low mortgage rates.
If there is a concern about the recovery, it is the continued slow employment growth. In September, there were 12.1 million unemployed Americans, which portents slow income growth. This could prove to be an obstacle to recovery, as such high unemployment means fewer Americans eligible for mortgage loans.
The Real Estate Marketing Index issued its support of news, reported by Bloomberg, that home starts jumped in September to their highest number since July 2008. Bloomberg also reported that builder confidence is up, as are homebuilder revenues and contracts for upcoming projects. All of this points to solid recovery trends for the housing market.
About Real Estate Marketing Index: REMI is a La Jolla, California-based online journal that provides real estate professionals with marketing tips, trend analysis and trade/market news.